Japan Display Inc. (JDI) intends to acquire Panasonic and Sony’s OLED joint venture JOLED to better compete with Korean rivals and emerging Chinese players, reported Nikkei Asian Review.

JDI will raise its stake in JOLED from 15% to more than 50% by the end of 2017 through stock purchases from state-backed Innovation Network of Japan that owns 75% of the venture. The deal value is estimated to fetch US$ 100 million, where Panasonic and Sony each hold a 5% stake in JOLED.

Japan Display Inc. (JDI) thin-bezel LCD screen for smartphone applications. The company intends to expand its OLED lineup by acquiring JOLED to better meet client demands, reported Nikkei Asian Review. (JDI/LEDinside)

INCJ, the leading shareholder of JDI, will be investing 75 billion Japanese Yen (US $650 million) into JDI to develop LCD and OLED businesses.

The financial support from INCJ will take the form of subordinated and convertible bonds to improve the company’s flexibility to expand output capacity and other developments.

As a main Apple display supplier, JDI primarily manufactures high-quality LCDs for smartphones, car monitors and computers, while JOLED makes mid to large-sized OLED panels.

Merging the two organizations could integrate Japan’s OLED technology, and also help JDI be able to provide both types of panels to meet client demands.

Founded in January 2015, JOLED mass produces cost effective OLED panels for TVs, medical and other industrial applications.

JDI was formed in 2012 through a merger of Hitachi, Toshiba and Sony panel operations. It continued to struggle with slashing costs and posted two consecutive years of net loss in its financial fiscal report for 2015.

Sluggish iPhone demands, which accounts for half of JDI sales, resulted in cash-flow problems during spring this year. The Japanese display maker is aiming to reduce dependence on smartphone panels and receive financial assistance from INCJ to address the issue.

Japanese companies have headed technology advances in LCD, OLED and other display panels but gradually lost ground to South Korea and Taiwanese rivals that drove up output capacity since early 2000s, forcing many Japanese companies out of business.

Following Taiwan’s Hon Hai Precision Industry’s acquisition of Sharp in August, JDI and JOLED were the only two Japanese panel manufacturers left in the industry.